Here's a quick experiment I did a while ago to paint a texture on an animated skeletal mesh. It's available as a Tier 2 reward on my Patreon: https://www.patreon.com/GhislainGir
It may be great for localized damage and things like that. Please note that this is, for now, broken in UE5. The system uses Scene Capture Component in Additive mode which is bugged in UE5 at the moment.
Shout out to the author who wrote this article that inspired me to try this: https://www.raywenderlich.com/6817-dynamic-mesh-painting-in-unreal-engine-4
A breakdown of the technique